Insight

German Power Market Forecast – January 2019

This quarterly update presents Aurora’s comprehensive view on the state of the German power market, and includes our latest outlook on prices, generation, capacity, and asset performance to 2035.

Key highlights this quarter include:

The German baseload power price is forecasted to increase from 44.6 EUR/MWh, which was observed in 2018, to 52.2 EUR/MWh by 2025, then rise to 60.3 EUR/MWh in 2030 and 67.7 EUR/MWh in 2035. Compared to our October 2018 report, power prices are slightly higher, with an average delta of 0.4 EUR/MWh across the forecast horizon.

The increase in power prices is mainly driven by lower renewables build-out, in particular for wind. In the short to medium term, onshore wind build-out slows down due to lower auction volumes and delays in the realisation of projects conducted by citizen energy companies. In the long term, further upward pressure on prices results from lower offshore wind build-out, given that the additional auctions specified in the coalition agreement have not been enshrined into law by the federal government.

While we have not incorporated the final report of the coal commission into our modelling yet, the coal exit trajectory proposed by the commission is very similar to the generic long-term coal phase-out timeline, which we assumed in our last reports. As in our October forecast, we treat the 65% renewables target specified by the coalition as an additional scenario beside our central view, given that the exact implementation of the target is still unclear.

The exhibits from the report can be downloaded in PDF and the underlying data in Excel format from the download section of EOS.

Aurora's power plant performance summary provides a monthly snapshot of financial and operating performance for individual plants on the German electricity grid. We collate, clean, and process the data so that it is readily digestible and error-free.